How to Tax Carbon

Conservatives can fight climate change without growing government.

Rather than acknowledge climate change as a major public-policy issue and draft a serious proposal to deal with it—to counter the left’s plan to expand dramatically the size, scope, and cost of the federal government—the right has too long pursued a course of obstructionism that amounts to little more than political theatre.

If this sounds familiar, it’s because similar circumstances allowed Democrats to pass Obamacare after decades of agitating for universal healthcare. Liberals spent years building a policy infrastructure to advocate for greater government involvement in healthcare, while according to Reason’s Peter Suderman,

Republicans, on the other hand, all but ignored health policy for all those years. Yes, there were think tank wonks and a handful of administration staffers who were deep in the weeds of health policy, but the party and its allies didn’t invest in developing ideas or consensus. Your average Republican legislator didn’t have a great grasp of the issue, and would have struggled to tell you what the party was actually for when it came to health care.

So it is today with climate change. Despite the consensus of 97 percent of scientists that the planet is warming and that human activity is a significant part of the cause, a March 2013 Pew Research Center poll found that just 44 percent of Republicans believe in climate change at all. To the extent that establishment conservatives talk about climate change, it’s to question its scientific validity or complain about the left’s policy response.

This is a mistake. No amount of hand-waving can change the science of climate change, mitigate its likely consequences for the environment, or wipe away the legal authority that the federal government already has to regulate carbon dioxide emissions.

Even if Congress does nothing, the Environmental Protection Agency can regulate carbon dioxide emissions through the spectacularly ill-fitting mechanisms of the Clean Air Act. That law, a creature of the 1970s regulatory state, was designed to regulate—within circumscribed geographical areas—gases such as benzene or oxides of nitrogen that pose immediate risks to human health in high concentrations.

Carbon dioxide emissions, by contrast, are global in nature. A ton of CO2 emitted in Peoria or Pyongyang has basically the same impact on the environment and will remain in the atmosphere for decades. Carbon dioxide also happens to be necessary for plant life and does not by itself pose immediate negative consequences for human health.

Nonetheless, the U.S. Supreme Court’s 2007 decision in Massachusetts v. EPA found the agency has authority to regulate greenhouse gases if they are found to endanger public health. In the aftermath of this ruling, the EPA issued an “endangerment finding” that asserted the agency’s regulatory authority under the Clean Air Act. Although there are good reasons to question the court’s decision, it is now settled law. Subsequent efforts to reverse the finding through litigation have failed, and a landmark U.S. Senate vote to strip the EPA’s authority in 2010 attracted only 53 of the 60 needed votes.

In a speech at Georgetown University in June, President Obama outlined the EPA’s complex and expensive scheme to regulate greenhouse gas emissions from existing power plants, a plan likely to cause serious disruption to electricity generation and to the economy as a whole. Earlier executive action had already applied stricter standards for building new electricity-generation facilities, making it effectively impossible to build coal-fired power plants. But applying the heavy hand of the EPA to existing facilities is poised to be the game changer.

The best estimates about what such a regulatory scheme will cost are staggering. A study from the National Association of Manufacturers estimated that six greenhouse gas regulations alone will weigh the economy down by a minimum of $142 billion per year and potentially, when other costs are included, as much as $630 billion per year—nearly 4 percent of U.S. GDP in 2012. That’s roughly equivalent to half of all corporate income-tax revenues, imposed in a highly uneven and opaque manner. Even worse, costly carbon regulation will be layered on top of all the other burdens borne by businesses and individuals with no offsets whatsoever.

While conservatives continue to fight a losing battle on the science of climate change, the EPA is moving forward with regulation. As with healthcare reform, unless there’s a miraculous Republican revolution delivering 60 Senate votes and a Republican president in 2016, carbon-reduction efforts almost certainly are here to stay. The question that conservatives must now grapple with is whether we’ll achieve those emissions reductions through onerous regulation with no attention paid to cost, as the left desires, or through an approach based on limited government and open markets.

The best policy to address greenhouse gas emissions, while adhering to conservative principles, is a carbon tax combined with tax and regulatory reform. Merely uttering the phrase “carbon tax” strikes fear into the heart of many on the right. This is understandable, to the extent that what conservatives actually fear is a plan that would layer energy taxes on top of the overly burdensome tax and regulatory regime we already have.

But one need not engage in climate alarmism or capitulate to big government to make a case for a revenue-neutral carbon tax. In fact, President Obama’s recent speech helps illustrate why the right needs to consider one more seriously.

A conservative carbon tax has three key components: revenue neutrality, elimination of existing taxes, and regulatory reform. When combined, these policies would yield a smaller, less powerful government; a tax code more conducive to investment and growth; and the emissions reductions the law says we must achieve.

The first and arguably most important component is absolute, bona fide revenue neutrality. The federal government is already too large and expensive. Conservatives routinely oppose efforts by the left to raise revenue in order to shore up lavish spending and broken entitlement programs. A carbon tax should no more be used to fund bigger government than any other tax. Every single dollar raised by a carbon tax must be devoted to tax reductions elsewhere in the code.

There are alternative carbon-tax proposals that make bogus claims of revenue neutrality. For example, the so-called “fee and dividend” model pushed by some climate advocates and members of Congress would levy a fee on carbon dioxide emissions that then would be returned to citizens through some sort of flat dividend payment. Such a scheme easily could prove vulnerable to abuse: one can imagine dividends would be suspended in years of high deficits or that the program would morph into a slush fund that flows to progressives’ pet projects.

Instead of empowering government to generate a pot of money and relying on the beneficence of elected officials to return it to the people, reform must devote every dime of carbon-tax revenue to reducing other tax rates or abolishing other taxes altogether. Turning on one revenue stream while turning off others is how we prevent growth in government.

Which brings us to the second component of a conservative carbon tax: outright elimination of some of the most damaging and anti-growth levies on the books. For example, a Massachusetts Institute of Technology analysis estimates that a $20 per ton tax on carbon dioxide emissions could generate roughly $1.5 trillion in revenue over ten years. That’s enough to allow for the complete elimination of several levies that conservatives rightly regard as structurally deficient or duplicative: capital gains and dividends taxes, the death tax and tariffs.

If the average economist sat down to draft an ideal tax code from scratch, it’s unlikely that any of the aforementioned levies would exist. Capital gains and dividends already are taxed at the corporate level, and taxing them again when received by individuals is duplicative. Similarly, the death tax places a new levy on assets on which taxes already were paid. And tariffs, though they now produce a relatively small share of federal revenue, erect substantial barriers to international trade.

The consensus of conservative economic thought today is that governments should reform taxation to focus on consumption rather than income or investment. In other words, governments should target taxation on “bads” like pollution rather than on good things like labor, wages, and profits in order to raise revenue with as light a touch on economic growth as possible. This is why such prominent conservative economists as Kevin Hassett, Glenn Hubbard, Greg Mankiw, and Art Laffer have expressed support for a carbon tax swap. (The way this philosophy has manifested itself on the state level is in ongoing efforts, primarily driven by Republicans in places like North Carolina, to reduce or eliminate income taxation in favor of expanded sales taxes.)

The final component of a conservative carbon tax plan is wholesale reform of regulations that are intended to reduce greenhouse gas emissions. Because of its cost and complexity, a carbon tax should not be layered atop an existing regime to regulate carbon emissions. Instead, we should preempt the EPA’s ability to regulate emissions from power plants while also considering elimination of policies like Corporate Average Fuel Economy standards for automobiles. In short, the carbon tax should supplant entirely the myriad regulations that exist to reduce emissions. After all, if the tax on carbon is priced properly so that it “internalizes the externality” posed by emitting a ton of the gas, there is no need for other policies to achieve reductions.

A carbon tax will not solve climate change in and of itself. In fact, it can do little more than put a dent in the problem, since the United States accounts for just 16 percent of global emissions, compared to China’s 29 percent. Indeed, the most important thing the U.S. could do to address a changing climate is to ensure that it is wealthy and prosperous, to better afford necessary adaptation and mitigation efforts.

But adopting a revenue-neutral carbon tax with regulatory preemption will do two very important things. The first is to provide a counter to liberal big-government policies that are already underway: conservatives currently are utterly absent from an important policy debate that will advance without their input. The second is to establish a tax code that is more pro-growth. Eliminating onerous EPA regulations and swapping out taxes on positive things like investment in favor of taxes on energy use would lighten the load placed on businesses and individuals by the federal government, giving the U.S. a larger and more vibrant economy to help absorb future climate impacts.

The good news is that this debate isn’t entirely theoretical. There are various forms of carbon taxes already in effect around the world. Perhaps the example most comparable to the policy described here is in the Canadian province of British Columbia. That province has had a tax on carbon emissions since 2007, a levy now set at 30 Canadian dollars per metric ton, with the revenue devoted to reducing other taxes.

Early returns on the policy are quite positive. A recent study found that the province’s gross domestic product growth has outpaced the rest of Canada, while its corporate income tax rate has been reduced to among the lowest anywhere in the G8 countries. Despite concerns that it might grow government, the tax has stayed revenue neutral and enjoys broad public support. Polling of business and community leaders by the Pembina Institute found 64 percent believe the tax has been a positive move.

Reducing carbon emissions doesn’t need to entail bigger government and a damaged economy. A conservative carbon tax could achieve the same goals President Obama seeks to achieve without expanding federal power or contracting economic opportunity. A price signal operating in a free and open market would encourage people to transition to less carbon-intensive energy sources, while a clean tax swap and streamlined regulatory regime would ensure that government doesn’t grow larger and more powerful.

Conservatives should seize the opportunity to emphasize the superiority of free markets over central planning. A revenue-neutral carbon tax with regulatory reform would do exactly that.

More to the point, the revenue from a carbon tax needs to be directed towards mitigating the consequences of the carbon emissions. The point is not to raise moey but to change behaviour. You don’t want government to get hooked on the income from a carbon tax, then it is also hooked on increasing emissions, which need to be reduced.

If carbon emissions don’t go up, then the money is no longer needed to mitigate the consequences. This is a rare case where hypothecated taxes can work.

Yeah, everything you’ve outlined here makes for a pretty good taxation schematic. Shrill republicans will never get on board though, since as far as they’re concerned global warming is massive hoax perpetrated by the elitist liberal media.

“Carbon dioxide emissions, by contrast, are global in nature. A ton of CO2 emitted in Peoria or Pyongyang has basically the same impact on the environment and will remain in the atmosphere for decades.”

The US has such a restricted view of “protecting the environment” which really amounts to various forms of rent seeking. If we really wanted to protect the Earth’s environment, we could start with a few simple measures that involve US foreign policy. Questions to consider: How much JP5, diesel, etc does the US military use around the world? How much in the way of emissions such as CO2, SO2, NOX or whatever does US military emit in its operations every year? What environmental impact do 500 lb bombs, cruise missles, and depleted uranium have on the global environment? If there was an actual concern about the global “environment” then I’d like to see those questions asked and then place limits (e.g. Congressional war approval) on such emissions.

Until then, don’t tell me that some producer, processor, coal generator, farmer, etc has to pay some carbon tax or other such ridiculous scheme to bolster the profit margins of mega-gigantic corporations who can afford legal counsel to deal with these schemes. In other words, I don’t buy the whole better rent seeking through libertarian-conservative policy making because it is still destructive of the common good.

The question that conservatives must now grapple with is whether we’ll achieve those emissions reductions through onerous regulation with no attention paid to cost, as the left desires, or through an approach based on limited government and open markets.

There are a lot of good discussion points in this piece – but this is a really dumb statement.

The left overwhelmingly wants attention to be paid to costs – both on the costs to manufacturers and power generators (and eventually, consumers) … and costs to society as a whole.

National Association of Manufacturers estimated that six greenhouse gas regulations alone will weigh the economy down by a minimum of $142 billion per year

When I look at what you’re calling “greenhouse gas regulations”, I find:CSAPR – addresses emissions of sulfur dioxide, nitrogen oxides, and particulate matter from power plantsBoiler MACT – addresses particulate matter (PM 2.5), carbon monoxide, hydrochloric acid, mercury, and trace amounts of other heavy metals from industrial boilersCCR – addresses management of coal ash from coal fired power plants (anyone remember this? http://www.mnn.com/earth-matters/wilderness-resources/photos/americas-10-worst-man-made-environmental-disasters-0)Cooling Water Intake Structures – addressing adverse impact caused when power plant’s or factory’s cooling system
suck in and kill large numbers of fish and shellfish or their eggsOzone NAAQS – addresses levels of ozone which can cause significant and immediate localized health impacts

In short – NAM has taken a lot of regulations which address various types of environmental damages caused by industry and power plants. Which is a reasonable concern for industry – but it is not accurate for you to call them “greenhouse gas regulations” … because by and large they are not.

“97 percent of scientists that the planet is warming and that human activity is a significant part of the cause”

Well, actually that’s 97% of climate scientists, not all scientists. A quibble, for sure.

Its an indisputable fact that CO2 absorbs infrared radiation and re-emits it in all directions, so increased CO2 must have a warming affect. In a completely static atmosphere, it has been shown analytically some time ago to be about 1C for each doubling of CO2.

But as we know, the atmosphere is not static. There are many feedback loops. And its virtually impossible to solve analytically, hence the climate simulation models. THAT is where the controversy comes in. For years, the climate science community has been putting climate sensitivity around 3C, i.e. for each doubling of CO2, the average global temperature will increase by 3C. But there is a problem with that. The models using that assumption have been over-predicting the temperature increase. Actual temperature increases have been much more modest. They keep changing the models to reflect recent history, but then show an accelerated temperature increase for the future. The future comes, their prediction is wrong, and so they change their models again to agree with the recent past. They have yet to establish any credibility.

The climate science community has a perverse incentive to keep their predictions in the alarmist mode. The climate science community has what I call organizational momentum, and it causes bad science.

People who cannot understand the basics of climate science should not have an opinion on climate science, and should not say their predictions are true based on authority, i.e. 97% of climate scientists say so, etc.

Is the planet warming due to human emissions of CO2? YES. Is it something we should be alarmed about? NO. That is the sin of the climate alarmists. They take shreds of scientific evidence and run with it. A red flag for anyone should be that the climate scientists have never come out with a study that some place on earth will be better off with global warming. Its all bad everywhere, even in Siberia or northern Canada. Its all just bad bad bad. To which I say bs, bs, bs.

Sorry, but despite the claimed “consensus of 97% of scientists”, as a statistician at heart I’m still not convinced. GIGO, if you ask me. How about some more public discussion about the enormous potential human and financial costs of taking (potentially unnecessary, and even counterproductive) action, and about the rent seeking behavior of the climate change industrial complex?

You’re probably only going to get one shot at this. It seems politically naive to assume that Congress, once it passed a carbon tax, would have the will to revisit the tax in the near term except to slash it.

If you set the tax too high, and results in a significant disruption to the economy (or if the tax just happens to coincidentally overlay with some other economic condition which causes a downturn), it is almost a guarantee that the tax will be eliminated.

If you set the tax too low, and fossil fuel markets adapt their pricing to ensure that the tax doesn’t significantly affect the demand curve for fossil fuel consumption (which history has shown the market will do quite effectively), there’s not going to be any political will for raising the tax, and thus any positive impact will be blunted if not mooted.

So … how do you decide what the perfect tax rate, that will fall between those two very real potential outcomes, is?

Now, you could actually take some of those tax revenues and dedicate them to programs which will amplify the benefit – for example, investment in high speed rail and the smartgrid, bumping up tax credits for renewable energy production and electric vehicles, etc.

But that doesn’t seem to be the direction you want to go, and thus you are completely hanging your hat on setting the tax rate correctly from the beginning (and on economic conditions not altering that “sweet spot” over time). Which gives it a relatively low probability of success, imo.

Adding to my previous comment. The relationship of CO2 with temperature is logarithmic. That’s good. As CO2 concentration goes up, incremental increases in CO2 have less and less affect on temperature. That’s why the sensitivity controversy is so important. If the affect is not catastrophic within 1 or at most 2 doublings, then even the alarmists would find it hard to imagine it will ever be an issue.

Revenue neutrality seems like a nice concept, but I don’t see how in practise it could be made to work.

Surely if the tax causes the amount of carbon used to decrease then you will end with less revenue and a deficit problem?

Also the price of the tax will be passed on to the consumer which means higher energy prices which is bad for seniors on fixed incomes or low income workers/families. So the policy really demands some kind of accompanying program to take care of that. Where does the money for that come from and how does everything stay revenue neutral in light of that?

Finally, what are you actually getting for the aggravation of artifically raising energy prices? How much global warming are you actually going to stop with this? My understanding is that while the effect is not nothing, it would be in the grander scheme of things negligible precisely because it is a global problem – you’d need China and India and Africa and all the other places with industrial ambitions to get on board. That seems most unlikely.

So, it’s a nice idea in theory but in practise it’s unlikely to be revenue neutral, likely to demand the creation of new social welfare programs to balance out inequitable effects, it’ll be highly controversial because it will be visibly increasing energy prices and it won’t likely have a serious impact on the problem it is meant to be addressing.

Better off trying to pump money into energy research and fostering innovation and ways of bringing new competitive energy systems to market.

This whole article is based on the false assumption that “climate change” can be “fought”, and that it is something humans are responsible for and can stop.

The fact is, “climate change” is constant. The earth’s climate has never been some static thing that was only recently “changed” through human activity. Otherwise, we’d still be in an ice age, and glaciers would cover most of Europe and North America. How do environmentalist alarmists explain the “global warming” that took place tens of thousands of years ago, prior to any “greenhouse gas” emissions by humans? Eliminate all greenhouse gas emissions, and you will still have “climate change”.

Fluctuations in solar activity are the main force driving climate changes, but the “climate change” alarmists are driven not by actual science, but by a deeply anti-human, anti-liberty political theology that seeks ever more regulation and concentration of power in supranational organizations controlled by globalist elites. Environmentalism and “climate change” activism have become a sort of substitute political religion for the post-communist Left seeking a new ideological home for its fundamentally anti-human outlook.

” A study from the National Association of Manufacturers estimated that six greenhouse gas regulations alone will weigh the economy down by a minimum of $142 billion per year and potentially, when other costs are included, as much as $630 billion per year—nearly 4 percent of U.S. GDP in 2012.”
Such studies are rarely complete (I mean scientifically): they exaggerate the cost to those who paid for the study and do not mention all the benefits of the regulations.
Science is about measuring, verifying, explaining, repeating the steps – belief in proof, in numbers. Too many Republicans start with beliefs (big government = bad) and try to brush-off inconvenient science (global warming = myth). Instead of trying to destroy big government, the focus should be a more efficient government (aka less costly). Also, it would help if the government reduction targets would include ALL the branches. Target selectivity when reducing government programs has credibility issues..
“a carbon tax combined with tax and regulatory reform” as suggested by Mr. Moylan is the right approach: make government more efficient and accept science (OK – the 97% evidence of global warming).
” reform must devote every dime of carbon-tax revenue to reducing other tax rates or abolishing other taxes altogether. Turning on one revenue stream while turning off others is how we prevent growth in government.” – right on!

K Street’s oil patch subsidized assault on the Republican scientific psyche is the most egregious post cold war revival of disinformation to date .

Radiative forcing by unbridled release of CO2 is about as uncontroversial a phenomenon as inflation in consequence of printing money. Of course it is the rate that counts , but climatic bracket creep does not have to be hyped into an existential threat to remain a legitimate object of policy concern :

“but it is not accurate for you to call them ‘greenhouse gas regulations’ … because by and large they are not.”

Yep. These regs are really meant to eliminate coal power plants to the benefit of nuclear power producers. The marginal players (coal) are regulated out of business while the political beneficiaries (nuclear) get excess profits (rent).

Anyone who believes that the EPA’s green initiatives are in any way about protecting the environment is deluding himself. Funny thing is that some of the biggest corporate contributors to the Obama admin and other “green” causes are nuclear power producers. These guys could care less about the environment, all they care about is opening up the spark spread producing margin of their plants through regulatory structuring. “If you can’t spot the sucker in the first half hour at the table, then you ARE the sucker.”

@ck Yep. These regs are really meant to eliminate coal power plants to the benefit of nuclear power producers.

Right. EPA’s 316b regulations on cooling water intakes are meant to benefit nuclear power producers. The boiler MACT is intended to penalize coal power plants. Eliminating the exemptions which had for decades left unregulated the massive hazard represented by growing and toxic coal ash ponds has nothing to do with protecting the environment.

Sheesh. Please start with the evidence, and not your preconceived notions.

When the “global warming”, now “climate change” debate started, about fifteen years ago, I said that three things need to be proven:

1) Is “climate change” occuring, rather than just an experience of rising temperatures while approaching the apogee of a long cycle of temperature fluctuations?

2) Is human activity, to the extent climate change can be traced to it, a substantial cause of these changes, or merely one of many factors, most of which cannot be controlled?

3) If climate change is occurring, will continue in this same direction if conditions are not altered, and human activity is the substantial cause of these changes, is it feasible to alter human activity sufficiently to halt and reverse these changes?

Andrew Moylan is clearly convinced the answers to questions 1 and 2 are yes. I’m not a climate scientist and I’m not in a position to argue them, any more than I was when I framed these questions fifteen years ago.

But I have yet to read or hear a compelling argument that the answer to the third question is also yes. It isn’t here. I am inclined to doubt that the carbon tax Moylan and others have proposed will be any less onerous burdens to businesses, the economy, and the American people in general, than the other regulations he agrees should be avoided. But even if they were, where is the proof that if Congress enacts such a tax scheme there will be the desired effect upon the climate? This is an especially pressing question as we consider than an ever increasing share of the activity the 98% of scientists believe is driving climate change is occurring outside the United States and outside the reach of any such tax. Perhaps enacting such a carbon tax may be marginally beneficial. It may succeed in slowing the rate of climate change, but I don’t see how it is going to change it. Even if all the world enacted such costs to the emission of greenhouse gases, as long as the world’s population continues to grow, changes in the climate due to human activity will continue to grow. We may be able to stick our finger in the dyke, at considerable expense to us, but we aren’t preventing its eventual collapse.

If public funds are to be expended, directly or through tax credits which manipulate private behavior as Mr. Moylan’s prescribes, perhaps they should be devoted to preparing and altering the American economy and Americans’ lives to adjust to the results of a climate change which is predictably inevitable. Perhaps the climate will continue in its present path, perhaps it will inexplicably change in the opposite direction. But if the climate scientists are right and the former outcome is in our future, we will have better spent our money preparing for that future than waste it in an equally expensive but futile attempt to change it.

@William Daulton If climate change is occurring, will continue in this same direction if conditions are not altered, and human activity is the substantial cause of these changes, is it feasible to alter human activity sufficiently to halt and reverse these changes?

As wonderful as it would be to halt, and perhaps even reverse these changes – simply slowing the rate of change in order to buy more time for ecosystems to adapt, infrastructure to be built, population migrations that are almost inevitably going to result due to rising sea levels and regional changes in climate and water availability – has tremendous value to mankind.

And if I may appeal to your fiscally conservative nature, that rate of change will have tremendous impact on how much money will be spent by society to respond. Faster change means more crisis level situations, where huge amounts of money is lost due to various impacts, and money ends up being wasted as it’s thrown at “quick fixes” to situations. Slower change means more time to plan, adjust public policies (consider current FIRM insurance rate adjustments for coastal construction), build the proper infrastructure, etc.

Meanwhile, it seems pure defeatism for America to throw up our hands and say “more and more of this activity is taking place abroad, so why worry about our contribution?” Access to America’s and Europe’s markets is still one of the primary drivers of almost every economy on the planet – if we had the determination to do so, the US could include strong climate change provisions in every trade deal, and Europe would with a great sigh of relief go along with us. Greed is the only real factor keeping us from doing so.

In 1992, Republicans proudly boasted that their cap-and-trade solution to the emissions that produced acid rain were a big improvement over ‘the Democrats command and control policies.’ It may well have been. It certainly worked to reduce acid rain. But when cap-and-trade was proposed for CO2, all of a sudden the Republicans were opposed on principle.

Its always good to keep things simple. One complication of a carbon tax is the need to monitor and measure carbon dioxide emissions. That’s not a negligible feature, and it requires a certain level of bureaucratic administration. But it can be kept streamlined.

If a conservative proposal that reduces CO2 output can be passed with substantial majorities, while other proposals cannot, it makes sense to go with what commands substantial majorities.

I would suggest that the revenue might better be allocated to paying down the national debt, making up any shortfall in social security, and, if sufficient monies remain, reducing employee contributions FICA tax. Huey P. Long would approve.

“Reducing the debt” can be abused of course, if new debt is created as fast as old debt is paid off. There would have to be a reduction in the debt ceiling as part of the deal.

It makes no sense to talk about absolute “revenue neutrality” and/or cutting taxes when we are $15 trillion in debt. It takes revenue to pay that down.

America has just stopped the tax imposed to fund the Spanish American war. It ended over a century ago.

When Eisenhower considered the Interstate Highway system, he was told by his financial advisers that the funding mechanism, the road user tax, would create eternal bureaucracies. They were correct but did not consider that some 98% of the road user tax was never used for roads, for generations. Any conservative who believes that any new tax will not be similarly corrupted by Washington politicians is delusional.

Those who hold with the concept of climate harm from carbon combustion should go solve the problem in Tienanmen square. America has about 800 old coal fired power plants, and most are worn out. Asia is building 1200 new ones. They need the power because we drove our heavy industry offshore.

This is an absurd article except for one truth. The Supreme Court correctly held that if Congress passes a dumb law, full of motherhood and apple pie, it is nevertheless a law.

…Why aren’t more conservatives like this? As a liberal I don’t necessarily agree with all the positions Mr. Moylan takes, but nonetheless they’re sane positions, rooted in reality and not in a knee-jerk rejection of the science. I can’t say how much I wish that the public debate on global warming was centered on these sorts of points, rather than an inane argument over whether the vast majority of climate scientists or a few extreme right-wing economists and statisticians have a better understanding of the behavior of the global climate. I don’t care HOW the problem is solved, as long as it is solved, and would be absolutely delighted–elated, even–if liberals “lost” and human carbon emissions were efficiently and effectively reduced through wholly free market, conservative means. All I care about is the concentration of CO2 in the atmosphere, not the means by which it’s raised or lowered.

It has still not been demonstrated that the globe is warming beyond the trend that began with the end of the Little Ice Age (circa 1850). There have been undulations riding that trend line with an addded warming from 1917 to 1944 that is identical to the one from 1976 to 2000. . Also note the halt in warming from 1945 to 1975 similar to the present halt that started in about 2000. Dr. Syun Akasofu has clearly shown the high and coincident correlation to normal natural multi-decadal oscillations of climate, (e.g. El Nino)

Correlation is not proof but its message is being overshadowed by pure politics. The IPCC says that the past 13 years or so of a halt in warming are not enough to discredit the human caused warming theory. That is odd! It was in 1988 that Hansen delivered his famous warming paper and it was serioius enough then to cause international committees to form to deal with an alarming problem. That was a mere 12 years after the second warming undulation started. Those 12 years were sufficient time to warrant action yet the past 12 years are not enough to disprove it! Wow.

Isn’t it obvious that this whole issue never arose from scientific studies but rather from political cause. Those folks who wanted an international order under their auspices did not die with Communism. Rather “Eric the Red” is now known as “Eric the Green”.

They have captured science, the modern day equivalent of religious authority, and bent it to their purpose. They feed billions to climate modelers who cannot find a single positive thing about warming because that would cause an end to their funds. Those modelers have captured climatology from the field based data gathering types and have let their models replace their brains. That serves their Green masters quite well. This thing is big and well advanced.. watch out.

Unbelievable to read a “conservative” take on taxing carbon as if the building block of life on our planet is pollution.

Frankly, if the planet is warming, good for us. Longer growing seasons, and a greater ability to feed 7 billion souls. Was the planet a global hellhole during the time when Greenland was actually green instead of glacial? Methinks not.

I’ve come to the conclusion that if sea levels rise due to “climate change/global warming”, it’s not a planet problem, but rather a real estate issue. Our coastal cities teeming with Marxist voters might have to move inland. Oh well…

Bill Meyer, to paraphrase a Saturday Night Live monologue from circa 1976, “Federal bonds are going to be used to bus Marxist voters from teeming coastal cities to YOUR NEIGHBORHOOD to vote Democratic and KILL YOUR PUPPIES!”

Do you think they’ll all magically turn into Republicans when they move inland? This, if nothing else, should motivate you to support a carbon tax. 🙂

Fair point that “carbon” is the building block of life. Carbon is our friend in many ways and places. Setting aside the media’s penchant for tiny newsbytes, what we need to tax is carbon DIOXIDE emissions. It would be nice if we could simply break the double bonds holding the molecule together, releasing extra oxygen, and make diamonds out of the carbon. But its a very stable bond, and its expensive to break, unless you are a green plant. They are already working hard to keep carbon dioxide down to the level its at. Better not to create more of the gas in the first place.

Yes,by all means lets put the energy sector,one of the few areas of the economy going strong,on it’s back. Sorry to the author,but a “conservative”carbon tax would be devastating to the economy. When this publication sticks to national defense issues and foreign policy,great. Sometimes though,I think Mr.Buchanan is the only legitimate conservative.

“Shrill republicans will never get on board though, since as far as they’re concerned global warming is massive hoax perpetrated by the elitist liberal media.”

Actually, I heard the hoax was perpetrated by the U.N. who are obviously in cahoots with the climatologists, the leading science academies, Al Gore, the liberal media, and Big Green to further the global socialist green agenda to steal freedom. It’s true. I saw it on a comment board at wattsupwiththat.

Media drums into us that we are dependent on oil, coal and natural gas, and belittles our opportunity for a profitable, safe, clean energy economy? Why? Fossil fuels hold an 85% monopoly of the energy market and have campaigned for 20 years on the theme that climate science is uncertain. It’s easy to be taken in, unless you actually seek out reliable information. The people who sent a unit to Mars, who operate the satellites and who predict our weather, check their info. NASA, NOAA, Academy of Sciences, and the American Meteorological Society all put their research online. Read it, and make up your own mind.
Product promotion is all well and good, but it is not right for companies to be deceitful to sell products, especially when national security is at stake. It’s time for fossil fuel developers to give way or move into production of safer clean energy and efficiency. They have commandeered the energy market for too long; its time for free market innovation, shared profits and growth in American energy technology industries. Government is supposed to protect our businesses so they can compete. A carbon tax would help.
Still wonder about the blogsphere message against the validity of climate science? Look up Naomi Oreskes , go to energyfactcheck, and check out dirtyenergymoney.

Siarlys Jenkins, THAT was funny, thanks. Still, my point being that I fail to see CO2 as a pollutant in need of much control. Even here in Oregon, we have scientists who are marveling at the re-greening forests in our area. Some are starting to attribute this to rising levels of CO2, which our plants and trees are delighted to chemically “lap up”.

For example, I was in a drive through lane behind a 1969 Cadillac. (I drove one of these as a young man) I noted the acrid, raw gasoline-tinged exhaust of this car. Then I remembered that ALL cars smelled this way “back in the day”.

You NEVER smell this from a modern vehicle. We’re doing so well at controlling real pollutants, that fear mongers now want to regulate the rest of civilization away in order to restrict “plant food”.

Bill Meyer, it seems you are a person one could have lunch with while debating the finer points of this subject — all of us exhaling carbon dioxide with every expostulation.

The pause in warming of the past few years may indeed be due to plants lapping up the increase… but there are probably limits to how much they can lap up. The oceans are also unexpectedly absorbing a good deal of it, but that is making the waters so acidic that the shellfish harvest is suffering badly, and farmed oysters are being sustained by pouring large amounts of lime into the breeding ponds.

One problem with this whole question is a large portion of humanity tends to react to “How do I feel today?” rather than “What will this mean to me and my children and grandchildren in the long term?” On a particularly hot humid summer day, huge numbers believe in global warming and want something done about it THIS WEEK. In a cold winter blizzard, its obviously baloney.

There is enough science about the long term trends to be worried. There are enough things we could do to reduce the hazard, without returning to subsistence farming (actually reducing carbon dioxide requires advanced technology), that its worth pursuing.

As to setting back the energy sector, every big oil company is investing heavily in renewable technologies and recasting themselves as “energy companies.” It will be massive capital investment, not hippie communes, that reduces the carbon dioxide level in the atmosphere. But, we will eventually have to monitor that we have ENOUGH carbon dioxide in the air. That’s a problem for the next century, and easier to fix.

Very well argued and persuasive. For years I have been “testing” liberals by offering a revenue-neutral carbon tax. Those who refused (nearly all of them) proved to me that growing the government mattered more to them than saving the climate. I don’t see why any conservative of good will would turn this down. If there’s a ONE percent chance that changing tax policy could stop us from ruining the only inhabitable planet we know of… well, what would Edmund Burke do?

@John Zmirak, I’m not sure you tested enough liberals ;-). To me, the reason to prefer a cap and trade approach is the same reason it actually works in practice. Once you set up cap/trade, you create a market that has incentives to reduce the pollutant. So it conforms with “conservative, market-based” principles.

A carbon tax, pretty much, does too, but the biggest problem with a carbon tax is that it is easy to repeal. A cap/trade system creates a bunch of self-interested parties who want to keep that market going. That has its own set of downsides, true, but it does have the benefit of keeping the policy aligned with the long-term goal of emissions reduction.

A carbon tax imposed for the purpose of reducing carbon should indeed be revenue neutral. If it is imposed for the purpose of raising revenue, then its pristine virtue as a tool for reducing carbon is damaged.

If there is a case to be made for raising net revenue, it should be made independently of what evil things need to be taxed, and then, of course, we can look at how best to spread the pain.

I’d just as soon raise the top income tax bracket to 50 percent over 2 million dollars, while setting the carbon tax at whatever level will best control carbon while fostering economic innovation.

But then, reasonable people might differ as to what taxes will be reduced courtesy of the carbon tax. Some might favor social security payroll taxes, some both worker and employer contributions, some worker only, some employer only. Some might want an increase in the standard deduction, others a reduction in the top tax bracket. Some might favor reducing the corporate tax rate, others the inheritance tax. So that’s a legitimate debate even within the framework that the tax should be revenue neutral.

If a carbon tax succeeds in reducing carbon dioxide emissions, then there will be less and less revenue from that source, and revenue neutrality means those other taxes will have to slowly rise again, at least part of the way.

On a bit of a tangent, but this is one of my hobbyhorses as an accountant:

Eliminating capital gains and dividend taxes, on the theory that the income has already been taxed at the corporate level, preserves extremely distorted incentives. Better to eliminate the corporate income tax and tax capital gains and dividends at the same level as labor income.

The corporate income tax system is a monstrosity of loopholes and inefficient tax credits. Huge sums are paid by corporations to avoid taxes, and huge amounts of corporate cash are kept offshore rather than be subject to taxation. These depress investment substantially. In the same vein, taxing capital gains and dividends at lower rates than labor income creates the opportunity for compensation-related chicanery that divorces people’s earnings from the value they create.

A simpler, better tax system would reduce the 3 systems (corporate, capital gains, and labor income) to one (all individual income taxed according to the same rate schedule). The government wouldn’t lose any revenue, as any money that leaves a corporation through dividends or share buybacks, or through salary or other expenses, would be taxed as individual income when received by the people who were paid. Huge inefficiencies and loopholes in the tax code would be swept away in one fell swoop.

Then we impose a carbon tax, and a countervailing reduction in income tax, and we have a much less distortive tax system that does far less to punish positive activity (creating value and making money), while doing far more to punish negative activity (climate change).

Great piece. Very thoughtful and intelligent. I had become resigned to thinking that all US conservatives these days had decamped to the simplicities and idiocies of Fox News. (But I see there are plenty of this ilk who present their views on this website). More articles like this in conservatives circles please … and I speak as a European socialist grounded in Marx and, yes, Malthus.

What will you do with all the money except give it to communists to fund the UN?
Water vapor and naturally occurring carbon dioxide are over 99% of all the greenhouse gases. None of the computer models use water vapor because human causes go to zero in such a model way below the 3% margin of error.

The entire argument is a scam and nothing more.

Corporations dont pay a tax they collect a tax form their customers you.